Corbett’s Property Tax Reform Throws a Curve Ball to School Districts . . . Limits on Act 1 Exceptions May Cause Angst to School Boards

School vouchers, Marcellus Shale fees and transportation funding may have been temporarily sidelined in Corbett’s budget but not so for property tax reform. 

When Gov. Corbett inked the budget this week, school districts across the commonwealth collectively received a curve ball. Included in Corbett’s budget was property tax reform, which makes change to the Taxpayer Relief Act of 2006 (Act 1) that could effect future school board’s financial decisions.  

With school districts struggling with significant reduction in state spending, many used Act 1 exceptions in their budget decisions, which permit tax increases without allowing voters the right to veto. However, with Corbett’s property tax reform, the school districts will not be permitted to increase property tax above the rate of inflation without voter referendum. Corbett suggests that the property tax reform will give the power to the taxpayers to decide whether they want a property tax increase to fund a particular program.  A reduction in allowable Act 1 exceptions will force school boards to make their case to the voter for approval of a property tax increase.

Prior to the amendment, Act 1 included 13 permitted exceptions including new construction projects, debt, pension and special education costs – school boards could increase property tax using these exceptions without a voter referendum.  The Act 1 exceptions will continue to include special education spending and payments to the state pension system but no other exceptions will be permitted without voter approval.  

It is my understanding that if a school district has a building project underway, the previous Act 1 exception for construction will remain in place for the length of the project.  However, the amendment to Act 1 does not permit an exception for future constructions projects without voter approval. So where does the Act 1 reform legislation leave TESD’s planned transportation garage/storage building on Old Lancaster Ave.? Although the project is only in the initial architectural development stages, the Facilities Committee may need to rethink their plans or be prepared for voter input.  No longer qualifying for an Act 1 exception, this proposed new construction project would require a voter referendum.  In addition, because the transportation garage is not educational programming, I would suggest that voters might not show their support for a property tax increase for this type of project.

By removing so many of the Act 1 exceptions, school boards will be limited in their ability to increase property taxes without voter referendum.  On the other hand, you could say that property owners in Pennsylvania will have a more active roll in what school boards do with their money. Gaining voter support at the polls will require public convincing by school boards. Do you think that this is the way for taxpayers to receive property tax relief?  I also wonder if some school districts will opt for creative responses to the Act 1 changes, such as forming their own charter schools.

On the subject of property taxes but slightly off topic, the T/E school district tax bills arrived in the mail.  Having just read somewhere online that the average school taxes paid in Pennsylvania is $1,200 – I am struggling to see how that is possible. 

My husband and I own an investment property in Glenhardie Condominiums in Wayne — a small 1-bedroom condo.  According to the tax bill, our school taxes for the 1-bedroom condo are $1,232 — equivalent to the average school tax bill in the state. It is interesting that our 1-BR condo represents in T/E the model for the ‘average’ price of real estate across the state. So . . .  $1,200 in school taxes buys you a 1-BR condo in the T/E school district – wonder what that same $1,200 in average school property taxes buys you in other parts of the state?  A quick search online indicates that Pittsburgh is ranked as one of the ‘best buys’ in America.  For the price of a 1-BR Glenhardie condo, one could buy a nice 4-BR house in Pittsburgh! 

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  1. If it keeps the TESD from building on the Old Lancaster property, that alone makes this a good idea. How many empty buildings line Rt. 30, some with loading dock space. There is ZERO need to build a new facility in a residential area.

    However, this is not what they think it is. It’s another example of people with all the answers failing to have all of the information. It can put townships at war with schools — because anytime new construction brings about enrollment increases, it will create a budget crisis that only a referendum can fix — and call me cynical, but I don’t believe in our “no changes” community that you can count on 51% of any voting group to decide to spend money.

    And yes John — I have written my representative about it.

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    Pattye Benson Reply:

    If it keeps the TESD from building on the Old Lancaster property, that alone makes this a good idea. How many empty buildings line Rt. 30, some with loading dock space. There is ZERO need to build a new facility in a residential area.

    Agreed!

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    give it a rest Reply:

    Don’t know when you will have something on the subject, so I’ll use this “Agreed” to offer the comment that I don’t want to hear one more “pro sidewalk” chant in this township, St. Davids or not, “deal’s a deal or not” until Old Lancaster Road and the new “state of the art” sidewalks with reduced impervious coverage and “calming effort” traffic management. It is a tragedy how rundown it all looks. There are weeds everywhere, nothing is neat, nothing matches. It’s a clear case of green ideas gone awry. That was a lovely stretch of older homes, well maintained for the most part. Now it may as well have cars on blocks in the driveways and front yards. Should we pave another well maintained street and see it happen again?

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    Pattye Benson Reply:

    Ahh . . . the bump-outs on Old Lancaster. I haven’t driven on that road lately, sounds like I need to visit. Thanks for the heads-up.

    Pattye Benson Reply:

    I believe the upkeep and maintenance of these ‘bump-outs’ (or whatever they’re called) are the responsibility of the homeowners. It was my understanding that the contractor was to plant wildflowers in the spaces – I guess that did not happen. I also thought that there was some kind of weed killer being used in the space. It seemed confusing to me at the time if one of these bump-outs was shared between neighbors (they did not follow property lines) and there was not neighbor cooperation on mowing, etc. there could be problems. I remember thinking that an easy solution would be to fill the space with small river rock or gravel so as to avoid the cutting grass or weeding issue.

    Do you know if this section of Old Lancaster is considered in the Western or Middle dristrict of the township?

    citizenone Reply:

    The school board has to show they can properly manage the $105M they already have before the electorate will give them any more via a referendum. That means showing they can manage employee compensation by saying no to large salary and benefit increases. The next opportunity is in 2012-13 when the current teacher contract expires.
    .
    Until then, all anyone has to do is cite the average teacher salary, the maximum teacher salary, the days worked each year, the length of the school day and the percentage increases over the last few years to defeat a referendum.

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    give it a rest Reply:

    Needs to be an exception for enrollment increases. When the Greens at Waynesborough was subdivided and developed, along with Berwyn Estates, not a single provision was made for the impact on schools. There are still several parcels in our township, limited as they are, that could create a population problem that the “exceptions” under consideration would not cover. Ottherwise, C-1, totally agree with the rest of your statement. And I again suggest people with kids entering and early in school should shy away from service on the school board until the next contract is signed. It’s not going to be pretty.

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    CHV Reply:

    The “proposed” plan for a maintainence & storage buildings on Old Lanc, RD is more than an “idea”.. so far .they have approved $57,000 for this project ($18,000 to Daley & Jalboot for arch. services & $39,000 to Chester Valley Engineers for engineering services)..a lot of NON EDUCATIONAL tax money being spent for an idea… It should go to the full board for a vote in the fall………… Don’t forget the $400,000 they need to spend for the remaining property . TESD still has a permit to build a multimillion dollar parking lot next to TEMS ..Give the taxpayers & residents of Old Lanc. RD a break.

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    give it a rest Reply:

    What do you think people who are opposed to building there should do? Can you tell us the best meetings to attend? The notion of building anything new, when there are empty buildings all over the township is beyond my understanding. “Convenience” doesn’t merit that high a price!

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    CHV Reply:

    Write to the school board….not every member agrees with this “proposed plan” and eventually there will be a vote for this project. … I feel sorry for the maintenance dept..they’ve been uprooted, stuffed at ESC, the former bus garage and spread around to the various schools..but this idea of cramming everything into a 1 acre space in a residential neighborhood is not the solution even if they do own the land.
    Poor planning from the very beginning!!!!

    Pattye Benson Reply:

    To send email to school board: schoolboard@tesd.net

    Since this new construction project has started (money already spent), will it be ‘exempt’ from Act 1 exceptions as outlined in Corbett’s budget (special education and pension costs only exceptions w/o approval by taxpayers). Will the TESD transportation/maintenance building project be allowed to continue or will it require voter referendum?

    Kevin Grewell Reply:

    Give it a Rest – You said: “The notion of building anything new, when there are empty buildings all over this township, is beyond my understanding.”

    You make a good point, to be sure. But I have to point out that the school board has been crucified many times on this blog (not necessarily by you, but by several others) for locating the administration in an existing office building rather than constructing a new building on the ESC site. Just proves how there are differences of opinion about how to handle these issues.

  2. Pattye…………

    I share your experience in owning an investment property. I have a one bed room property at Old Forge Crossing and the school tax bill is about the same as yours…$1100.

    As as single parent whose only child went to TE schools and as an entreprenuer who participates in the up and down of the economy….I feel that is time for the educators in our school system to learn that they are not a protected class entitled to financial largesse that most of the tax payers do not enjoy!

    Good for the Governor for making the buck stop on a local desk….

    We are only going to get out this financial mess when we all feel less entitled.

    There are lots of young people who would love to teach in our schools. We have a great college system to train teachers…..however,,,, there are no jobs due the current teaching staffs being so tenured. Time to make everyone accountable and participate in the economy. What ever that means! Yes…,Virginia…..it is about money and we are all in this mess together!

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  3. I’m paying $1,950 in school taxes for a two bedroom condo in Chesterbrook and have been doing this kind of thing for the last 12 years. I never had any kids that went to school at this township and am really disgusted over paying this year after year. For those families that use the school and have children attending them thru highschool, the taxes should be increased and discounted for those that don’t.

    What happened to the tax reductions we were going to see from all the Pennsylvania Casinos? Maybe someone is getting this benefit, but it certainly isn’t the people in this township. I didn’t vote for this Governor, but based on everything that’s going on, I certainly wouldn’t vote for him if he ran again. Do something the people and tax payers can feel good about!

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    give it a rest Reply:

    PA Constitution doesn’t allow differing tax rates. For a two bedroom condo, you could have 1 or 2 kids in the schools, costing $15-25K a year. Those without kids do help subsidize those with kids…it’s a social contract My mother gets social security — I pay it.

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    give it a rest Reply:

    Not exactly sure which point you are debating. JJ’s plea for reduced taxes or my answer that there is no way to do so.

    The point is that the PA constitution doesn’t allow differing tax rates. Your point is spot on that the property is valued independently of who lives in it — which is why people without kids in TESD schools complain about the taxes, but if you have kids in the system, you are paying dues. And indeed — you can buy similar square footage elsewhere for a different price and different taxes…..and much of it is based on the quality of the schools. that’s why the phrase that the TESD is “anti business” doesn’t wash. No income or mercantile tax — just property tax — is not exactly a deterrent to businesses locating here. Tax burden under 20 mills is pretty hard to match for commercial or residential property.

    The gambling revenues were a pretend way to help out people on property taxes, but the reality is that it’s PA gamblers spending money they don’t have to subsidize property taxes…..chasing their own tails in many cases.

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    give it a rest Reply:

    JJ
    Your anti-Corbett comments are a bit confusing. This post is about how he is supporting “pro-taxpayer” legislation that would tie the hands of school boards. The PA constitution doesn’t allow him to give you a discount. So what would your ideal candidate have to propose?

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  4. John
    I’m going to disagree with your reluctance to attach the flawed sidewalks on Old Lancaster to any further sidewalk development.
    A land development agreement is for a purpose. If the people in the community fail to live up to the requirements to make sidewalks workable, then I don’t think we should move forward of any sidewalks until we come to terms with what they mean — not just what they cost and who pays for the cost. If a yard was as unkempt as these sidewalk gaps, they would receive citations. It IS the homeowner responsibility — and it’s why the homeowners on that road balked at their construction. They have maintenance required of them, including snow removal, that goes beyond what they bargained for when they bought their homes. Regardless of the obstinance of the Planning Commission AND the BOS regarding sidewalks (it’s all a contest of power), it is irresponsible to build any more in this community until we develop a community standard for HOW they will be maintained, and by WHOM. And no — they are not lying. The “bump outs” were claimed by the green folks as a calming device, and it reduced impervious surfaces. It’s why I brought it up in connection with the TESD construction plans. I don’t accept doing anything JUST BECAUSE ….which is why a sidewlak adjacent to St. Davids deserves pause. I agree that the land development agreement called for it, and I don’t think any escrow should ever have been returned. But I also think that there is serious reason to consider exactly what sidewalks mean…not just a walkable community. This design is a loser. Will someone else design the next ones? These were far more expensive than strict concrete. Aesthetics part of the reason?
    In other words, I want answers to questions, not just reasons for answers.

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    Pattye Benson Reply:

    Just to clarify — the St. Davids Golf Club ‘sidewalk’ is not really a sidewalk — it’s a walkway, not using concrete material. As part of St. Davids signed land development agreement, I don’t see how St. Davids should be permitted to ‘break’ their contract when others (mosque on Valley Forge Rd as an example) were required to fulfill their contractual obligations. Would you suggest that the country club’s 6-yr. old contract with the township should just be ignored? Or, are you in favor of a ‘payment in lieu of’ arrangement for St. Davids. If so, what would be the appropriate dollar or percentage amount? I would think that the $25K held in escrow would not come close to meeting the expected percentage obligation.

    Personally, I don’t care whether there are sidewalks at St. Davids or not (albeit the green route network, township comprehensive plan, Planning Commission and results of sidewalk subcomittee all call for sidewalks at this location) but I do care that a signed land development agreement exists. The country club came in front of the Planning Commission 4 times asking for relief from building the walkway and each time the PC turned them down. If the BOS want to override the decision of the PC and the results of the sidewalk subcomittee and public input, they certainly have that right — I just ask that they not wrap their decision around the July 18 sidewalk ordinance public hearing. The St. Davids issue should be handled seperate and apart from the sidewalk ordinance discussion.

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    give it a rest Reply:

    I do not suggest waiving any agreement — just that nothing further is built or mandated as far as sidewalks until this township comes to some logical conclusion about what a sidewalk IS….it is a change in the aesthetic character of this community.
    The notion of a signed agreement regarding this sidewalk is perfectly fine — and the PC refusing to grant relief is their job. What I want, as a taxpayer and resident, is relief from randomly built walkways and sidewalks that do not form a network, do not create any continuity in the walkability. If and when network of walkways and sidewalks are scheduled and funded, then the full network should be implemented. Why build a walkway along St. Davids until it goes somewhere? When and if the township has plans in place to build something to connect to it, then pull the trigger and put in the walkway (and why is it a walkway and not a sidewalk we might ask? )

    The point is — there needs to be a plan for the network, not just how to get a piece of it built.

    And to Kevin G above about the response to TESD acquiring the TEAO site rather than build — I don’t think that’s at all the same issue. The TEAO cost a fortune, were an upgrade over the required facilities, and were done (imo) recklessly without regard to location or common area requirements that prevented signs. The new offices are hidden. A maintenance building — hardly the same thing. That could and should be located in a non-residential area — the costs of renovating an existing site that is already in the landscape is simply more taxpayer friendly. The ob jection to moving the ESC to the TEAO is because there was NO PLAN on what to do with the ESC after the move. No continuing dominoes to keep falling.

    Drive on Rt. 30 from Berwyn to Paoli and look at the buildings with large signs outside (backing up to the rail tracks) and pick at least 2 or 3 that woudl easily accomodate the maintenance requirements. BUilding a new facility, on a residential street (regardless of the fact that the bus garage is there, and the Timothy School), and I assure you that tennis courts on the Old Lancaster site would be a welcome community addition (since they own the land and woudln’t need to buy the last piece to do it). The maintenance and storage can go almost anywhere. No need to constituent access (like the TEAO).
    Strategic planning. Tactical processes.

    [Reply]

    Kevin Grewell Reply:

    Well, again, the plan was to keep the ESC site available for future education related uses (in a period unknown future enrollment growth and possible additional state mandates – there was talk of required all day K) rather than lock the site forever as an administrative building (the cost of which, whether building or rennovating, was considerable). Some day the taxpayers will likely benefit when we don’t have to buy that land elsewhere. But I did not intend to re-open the debate on the ESC merits. My point was simply that on a blog like this, the whole point (for some anyway) is to find fault. If the ESC site had been used instead, we would have heard lots of comments on how stupid that was as opposed to doing something sensible like utilizing existing office space.

    When you said how you could not understand building something when existing buildings could be used instead, I felt it was appropriate to point out that for a long time on this blog we heard just the opposite sentiment with respect to the ESC.

    I don’t necessarily disagree with you on your point regarding the maintenance building – in this economy it might be better not to go forward with that. I don’t know enough details to say for certain, but it should be revisited. To make a judgment we would need to know the alternatives and the costs of the alternatives, including the cost of doing nothing.

  5. Kevin..
    I remember the figures..renovating ESC or building new on the site was VERY close to the price they paid for TEAO.. because the IT Dept couldn’t go down there they took over the maintenance site..(a 2.5 million renovation) .. The maintenace dept was sent to ESC until it was torn down and now its been spread around the district with one group crammed at the bus garage. TESD never had a complete long range plan…There is packet from Daley & Jalboot on this project.. it compares renovating ($700,000) to building new (roughly 2 million and another million for a storage building) ….my neighbors are against this & many wanted the tennis courts..at least they were educational.

    [Reply]

  6. CHV
    I wholeheartedly agree with you. The costs of moving the ESC were never compared to reasonable options, and the use of the ESC property as a school is so unlikely as to be unrelated to the discussion. Before this economic depression, the MOST the ESC site would have been used for is as a place for a community pool/tennis courts, as it is adjacent to the property on Sugartown Road that should be acquired by the TESD. Regardless of the restrictions on that property, it is ideally situated as a community site, and its adjacency to the ESC site makes access easy.

    Regardless — the Old Lancaster road lots should NEVER be used for maintenance. The bus garage should ultimately be removed as well. The neighbors on that road endure the football traffic and carpool lines for TEMS. Additional parking for TEMS is a possibility, but only to get the queues off of Old Lancaster.

    What is the “budget” for the maintenance building as far as D&J are proposing? I’ll find a building that will substitute and save them money. The bus garage can move too. The only logic to acquiring the property on Old Lancaster is part of a strategic plan to expand the “sports” complex in the area, and improve the traffic flow for TEMS.

    None of this will happen given this stagnant economy. This is the same board that paid off $10M of debt two+ years ago (?) I think…and then did a big bond issue after.
    Teamer Field was meant to be renovated. Instead it was rebuilt and overspent. The facilities approach needs to return to one of “must have” vs. “want.” There is NO reason to build on land that is residential. Zero. The TEAO forced the maintenance building to be converted to technology, which took up a corner of the ESC, but now takes up a building.
    These projects need to be identified one by one, and prioritized — and then wait for financing.
    1. A/C – improve elementary ventilation and cooling
    2. Maintenance/transportation consolidation/relocation
    3. Recreation (pool, tennis courts, fields) — not a guarantee but what should be considered if the economy turns around.

    It is clear from the demographic trends that educational opportunities are dramatically expanded by athletic program success. We do not need any additional facilities, but we own land that is far more likely to serve in that capacity, and should be retained for that purpose. Kevin is right — you cannot buy land for the school. No one would allow the district to develop it. It took over a year to get approvals in place to put fields on the land adjacent to VFMS — and that land was DEEDED as future recreational land at the time the school was planned.

    The TEAO remains a bad decision, but it’s in the past and one that works. At the very least, if the economy would ever turn around, it is in an office park and could be repurposed and sold (though all that “business” that will come to Paoli if it is revitalized with office space will no doubt reduce the market demand office space elsewhere).

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  7. According to the info they need 6,500 SF for Maintenance & 3,100 SF for Central Storage..the Transportation Dept was moved to an office at TEAO..so that’s not a factor, March 2011 estimates
    Renovate $ 840,000 Renovate & ADD $2,702,000 ( they forgot to add the $400,000 for the remaining property. New Building Current Site $ 2,960,000 and New Building on Alternative Site $3,100,000 -$3,500,000 Rent or Purchase Unknown.Has anyone really looked at this site on Old Lanc. RD ??? Its 1.1 acre, with a bunch of wooden sheds all around plus they plan to put up this new building without getting rid of the old one and bring back all the vehicles that are scattered throughout the district..plus all the workers. Please remember its not just TEMS traffic its Conestoga & The Timothy School also.
    Thanks for discussing this ..the civil engineer firm was out drilling today..

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